When small-cap Company A decided to acquire two competitors in an effort to consolidate its production and increase its sales volume, its bold decision came as a shock to the market and to its larger peers who were portrayed as having missed the opportunity. Consolidation of its industry had come to a screeching halt in the last few years; therefore, it was seen as an aggressive move by one of the smaller players in the market.
What in hindsight proved to be an aggressive strategic move, at the time it placed the company in a delicate situation with many unanswered questions. In the midst of all the attention stirred by the acquisition, Company A's lack of an IR department left them particularly vulnerable to developing a dubious reputation for alienating existing and potential investors.
Quickly realizing the potential threat to their image and the possible long-term repercussions, Company A hired i-advize to help control the situation and begin building credibility. Our analysis confirmed the company's suspicions and proved that the company's outdated, minimal disclosure policy was largely responsible for the friction within the market. The main components of the problem were as follows:
As their IR firm, our main objective was to help the company improve its image in the market and begin communicating with its investors and analysts regularly. By opening the flow of communications between the two parties i-advize helped build credibility and transform the company into one of the most forthcoming players in its industry.
The core of the IR program that i-advize developed for Company A consisted of the following steps:
Under the guidance of i-advize, Company A quickly overcame its negative image. A proactive IR approach settled the market's concerns and laid the groundwork for a new and improved image. Our strategy and tactics were aimed toward overcoming specific concerns. Today, with i-advize remaining as its IR advisory firm, Company A is well known for its open disclosure policy and revered for its aggressive growth strategy.